Streamline Your Data Production for IRS 6055 and 6056
The IRS has new reporting guidelines to determine whether an employer is adhering to the Affordable Care Act (ACA). One concern for most employers with over 50 full time equivalent employees (ACA calculation), is that the data the IRS is requesting may be cumbersome and time consuming to compile. It’s important that you have procedures and the appropriate technology implemented, so when the data is requested you won’t spend hours trying to pull it together.
Two sets of recently released questions and answers provide guidance on the information reporting requirements under the ACA. (Refer to www.irs.gov for questions and answers about Section 6055 or Section 6056.)
The Q&As provide information regarding:
- The basics of employer and provider reporting
- Who is required to report
- Methods of reporting for employers under section 6056 (including alternative reporting methods)
- What information is required to be reported
- How to report the required information
Yes, the payroll companies have some of the data, but pulling all the data can be challenging for an employer. If you review the proposed 1095c form (http://www.irs.gov/pub/irs-dft/f1095c--dft.pdf ), you will see that there is information requested by the IRS that many payroll companies do not have access to.
There are technology systems available to streamline the data collection however, 95% of most businesses aren’t utilizing these systems. Investments in human resource information systems have traditionally been a luxury for most employers. The good news is that today, technology provides the efficiencies that employers need. It enables employers to effectively manage their risk around all aspects of employee benefit plans, and remain compliant with the new requirements. It’s important to rethink your investment in technology in this area. As a comparison, it’s the equivalent of riding a horse or flying an airplane across country. Both will get you there, but clearly one gets you there faster and more efficiently!
There are many types of systems with a range of costs and capabilities, so be certain to implement the type of system that best meets your needs. Whatever systems and procedures you put in place, it’s important that you be proactive and address this issue rather than wait until the IRS comes knocking. You should ask your benefits advisor what type of system capabilities they recommend for your organization, or contact Jamie Moran, HIA, MHP, a Principal and the Director of Employee Benefits at Provider Group. He can be reached at 401-671-6359 or email@example.com.
Jamie leads Provider Group’s Employee Benefits Practice. He designs and implements cost effective, long-term benefits strategies while balancing the employee’s demand for quality plans. Jamie works with businesses and non-profit organizations throughout Southern New England to develop a variety of traditional and non-traditional ways to approach employee benefits.